Walmart in Talks to Sell Medical Clinics Closed in April
Walmart has reportedly held talks with potential buyers of the medical clinics it closed in April.
Health insurance companies have been among those potential buyers, but it is not clear if any talks are still ongoing, Reuters reported Tuesday (July 2), citing a paywalled article by Fortune.
The retailer aims to recoup some of the investment it made in the clinics, whether in a sale or another takeover arrangement, according to the report.
Last week, Walmart sold its virtual care subsidiary, MeMD, to healthcare technology startup Fabric, per the report.
When announcing that acquisition in a June 28 press release, Fabric said the move would expand its virtual care services to 30,000 employers and 5,000 members.
“The MeMD team built a leading virtual care offering, and we are excited to welcome them to Fabric,” Aniq Rahman, founder and CEO of Fabric, said in the release. “This acquisition aligns with our strategic vision to transform healthcare delivery through innovative technology and exceptional customer care.”
Walmart announced its decision to close all 51 Walmart Health centers across five states and Walmart Health Virtual Care on April 30, saying there was not a sustainable business model for those operations to continue.
“This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time,” the retailer said in a press release announcing the move.
Walmart added that it will continue to offer other health and wellness services through its 4,600 Pharmacies and 3,000 Vision Centers.
During a May 16 earnings call, Walmart CEO Doug McMillon addressed the scrapping of the retailer’s healthcare initiative, saying the decision was “necessary but difficult.”
“There were a number of aspects that were going well, and we really want to be a part of the solution to improving health care in this country,” McMillon said. “But the reality is that given reimbursement rates and cost to serve, we could no longer see a path to achieving an acceptable level of profitability. And we’re committed to being disciplined with our investments.”
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